Correlation Between Ceylon Hotels and Browns Beach
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By analyzing existing cross correlation between Ceylon Hotels and Browns Beach Hotels, you can compare the effects of market volatilities on Ceylon Hotels and Browns Beach and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ceylon Hotels with a short position of Browns Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceylon Hotels and Browns Beach.
Diversification Opportunities for Ceylon Hotels and Browns Beach
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ceylon and Browns is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ceylon Hotels and Browns Beach Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Browns Beach Hotels and Ceylon Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ceylon Hotels are associated (or correlated) with Browns Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Browns Beach Hotels has no effect on the direction of Ceylon Hotels i.e., Ceylon Hotels and Browns Beach go up and down completely randomly.
Pair Corralation between Ceylon Hotels and Browns Beach
Assuming the 90 days trading horizon Ceylon Hotels is expected to generate 1.04 times more return on investment than Browns Beach. However, Ceylon Hotels is 1.04 times more volatile than Browns Beach Hotels. It trades about 0.27 of its potential returns per unit of risk. Browns Beach Hotels is currently generating about 0.14 per unit of risk. If you would invest 1,900 in Ceylon Hotels on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Ceylon Hotels or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceylon Hotels vs. Browns Beach Hotels
Performance |
| Timeline |
| Ceylon Hotels |
| Browns Beach Hotels |
Ceylon Hotels and Browns Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceylon Hotels and Browns Beach
The main advantage of trading using opposite Ceylon Hotels and Browns Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceylon Hotels position performs unexpectedly, Browns Beach can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Browns Beach will offset losses from the drop in Browns Beach's long position.| Ceylon Hotels vs. Seylan Bank PLC | Ceylon Hotels vs. Union Chemicals Lanka | Ceylon Hotels vs. Citrus Leisure PLC | Ceylon Hotels vs. Sampath Bank PLC |
| Browns Beach vs. Asiri Surgical Hospital | Browns Beach vs. Janashakthi Insurance | Browns Beach vs. HDFC Bank of | Browns Beach vs. Ceylon Guardian Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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